We use cookies to make your experience of our website better. To comply with the e-Privacy Directive, we need to ask for your consent to set these cookies. Please note that if you keep browsing this website without electing an option, your consent is deemed to be given.

Municipals derivatives are used to invest the proceeds of municipal bonds. Because municipal bonds commonly fund multi-year public works projects, most of their proceeds cannot be spent immediately, and must be invested to earn interest until they are ripe for use. These investment vehicles are known as municipal derivatives, an umbrella term that refers to various tax-exempt vehicles, including guaranteed investment contracts, advance refunding escrows, swaps, toptions, swaptions, collars, and floors. As a result of this conspiracy, the plaintiffs and other class members were deprived of extra money they otherwise would have received from their municipal bond investments and could have spent on important public works projects such as roads, buildings, and mass transit.

The lawsuits came on the heels of an investigation by the United States Department of Justice's Antitrust Division, the Internal Revenue Service, the Securities and Exchange Commission, and certain State Attorney Generals into industry-wide collusive practices in the two-hundred year old municipal bond industry. The lawsuits also followed Bank of America's conditional acceptance into the Antitrust Division's amnesty program, in connection with which there was disclosure of information regarding the conspiracy described below and the promise to provide full and complete cooperation to the Antitrust Division, the plaintiffs, and the class they sought to represent.